FICIL Sentiment Index outlines necessary improvement regarding efficiency of public sector
Foreign investors rated the investment climate in Latvia in the last 12 months as below average, as concluded in the “Sentiment Index 2022: Governance Edition” research by Foreign Investors’ Council in Latvia (FICIL) and Dr. Arnis Sauka from the Stockholm School of Economics in Riga (SSE Riga).
Investors assessed the overall investment climate with a rating of 2.3 points out of 5, and policymaker efforts to improve the investment climate over the 12-month period with a rating of 2.7 points out of 5.
In 2022, Sentiment Index research focused on investors’ cooperation with the public sector, the effectiveness of the public sector in general, as well as corporate governance issues in state-owned and municipality-owned enterprises.
Foreign investors plan to continue investing in Latvia
The study shows that almost four fifths (79%) of the foreign investors interviewed are planning to increase their investments in the upcoming years which is the highest percentage in the Sentiment index research history, this is higher than previous year, where 65% of investors answered in favour of continuing to invest. However, about one seventh (15%) of the respondents will not increase their investment while 6% indicated that this question is still undecided and will depend on various factors. Similar to last years study, workforce quality and availability were mentioned as one of the most important factors when a company is deciding to continue investing in Latvia.
FICIL held a Sentiment Index 2022: Governance Edition presentation event on 24th of April 2023. During the event public sector representatives, politicians, investors and present guests discussed and debated the results. The event was moderated by journalist Jānis Domburs.
About FICIL Sentiment Index 2022: Governance Edition
In early 2023 FICIL together with Dr. Arnis Sauka from SSE Riga carried out its eighth consecutive Sentiment Index research. In addition to the usual topics, the research also provides investors’ viewpoint on the effectiveness of the public sector and ways to improve cooperation among businesses and state administration. Executives from 55 companies participated in the interviews, representing key foreign investors in Latvia. Altogether, these companies (including their subsidiaries) contribute to 21% of Latvia’s total tax revenue and employ 18% of the total workforce of companies with an annual turnover above 145 000 EUR and 50% foreign capital.
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